The Impact of Dividend Tax Cut and Managerial Stock Holdings on Firm's Dividend Policy

2004 ◽  
Author(s):  
Jouahn Nam ◽  
Jun Wang ◽  
Ge Zhang
Keyword(s):  
Dividend Policy ◽  
The Impact ◽  
Dividend Tax

scholarly journals The impact of the dividend tax cut and managerial stock holdings on corporate dividend policy

2010 ◽  
Vol 21 (3) ◽  
pp. 275-292 ◽  
Author(s):  
Jouahn Nam ◽  
Jun Wang ◽  
Ge Zhang
Keyword(s):  
Dividend Policy ◽  
The Impact ◽  
Dividend Tax

scholarly journals Taxation and Dividend Payout: The Case of the Republic of Serbia

2021 ◽  
Author(s):  
Biljana Jovković ◽  
Stefan Vržina
Keyword(s):  
Income Tax ◽  
Dividend Policy ◽  
Statistical Tests ◽  
Transition Countries ◽  
Lower Number ◽  
Corporate Income Tax ◽  
Dividend Payout ◽  
The Republic ◽  
The Impact ◽  
Dividend Tax

Research Question: The paper investigates the relationship between taxation and dividend payout decisions of companies in the Republic of Serbia. Motivation: Including taxation in dividend policy discussion may allow for better understanding of decisions of companies to pay dividends. Prior worldwide research results on the impact of taxation on dividend policy are inconclusive, often contradicting and cannot be universally accepted. Despite abundant research in previous decades, the key drivers of dividend policy of companies are still unknown and there exists a so-called dividend puzzle. In addition, the research on dividend policy of companies in transition countries (including the Republic of Serbia) is relatively scarce. On the other hand, research in transition countries is important as transition countries have a significantly lower level of capital market efficiency and liquidity, having a lower number of joint stock companies and a lower number of companies that regularly pay dividends. Idea: Since tax burden may be a significant obstacle for companies to pay dividends, it may be relevant to research into whether corporate income tax burden has an impact on dividend payout ratio of companies, as well as the impact of dividend tax that shareholders have to pay on the dividend payout. Data: The study captured 23 companies listed on the Belgrade Stock Exchange between 2013 and 2018 that paid dividends in at least one year. In total, the research involved 92 dividend payouts. Research data have been retrieved from the Business Registers Agency of the Republic of Serbia. Tools: Research hypotheses are tested using EViews and IBM SPPS software. Statistical methods included descriptive statistics, correlation and regression analysis, as well as non-parametric statistical tests for independent samples. Findings: The analysis shows that corporate income tax does not impact a dividend payout ratio of companies, indicating that companies do not consider the corporate income tax when deciding on dividends, mostly due to the effective tax rates being considerably lower than the statutory tax rate of 15%. Also, statistical tests show that the dividend tax does not impact the dividend payout ratio, as there is no significant difference in the dividend payout ratio between companies whose largest shareholder is high taxed and companies whose largest shareholder is low taxed. Contribution: Research results may be of interest for company management when designing the dividend policy as well as for investors when deciding on shares investment in accordance with their tax preferences.

Impact of Dividend Tax Change on the Payout Policy of Indian Companies

2019 ◽  
Vol 20 (5) ◽  
pp. 1282-1291
Author(s):  
Sanjay Dhamija ◽  
Ravinder Kumar Arora
Keyword(s):  
Negative Impact ◽  
Payout Policy ◽  
Tax Law ◽  
Dividend Payout ◽  
Inside Ownership ◽  
Regulatory Changes ◽  
Before And After ◽  
The Government ◽  
The Impact ◽  
Dividend Tax

The article examines the impact of regulatory changes in the tax on dividends on the payout policy of Indian companies. The tax law was recently amended to levy tax on dividends received by large shareholders. As the promoters group is the largest shareholder, this is expected to have a negative impact on the payout policy of companies. Furthermore, companies with larger promoter holdings have a higher motivation to reduce their payout. The study covers 370 companies present in the BSE 500 Index and compares the dividend payout of the companies before and after the introduction of tax levy. The study finds that the newly introduced tax indeed caused a shift in the dividend policy of companies, particularly those companies which have high levels of inside ownership. The findings have significant implications for companies, investors and the government.

The impact of board composition and ownership structure on dividend payout policy: evidence from Saudi Arabia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Helmi A. Boshnak
Keyword(s):  
Saudi Arabia ◽  
Ownership Structure ◽  
Dividend Policy ◽  
Payout Policy ◽  
Board Composition ◽  
Dividend Payout ◽  
Content Type ◽  
Listed Firms ◽  
Propensity To Pay ◽  
The Impact

PurposeThis study examines the impact of board composition and ownership structure variables on dividend payout policy in Saudi Arabian firms. In particular, it aims to determine the effect of board size, independence and meeting frequency, in addition to chief executive officer (CEO) duality, and state, institutional, managerial, family, and foreign ownership on both the propensity to pay dividends and dividend per share for Saudi-listed firms over the period 2016–2019.Design/methodology/approachThe paper captures dividend policy with two measures, propensity to pay dividends and dividend per share, and employs a range of regression methods (logistic, probit, ordinary least squares (OLS) and random effects regressions) along with a two-stage least squares (2SLS) model for robustness to account for heteroscedasticity, serial correlation and endogeneity issues. The data set is a large panel of 280 Saudi-listed firms over the period 2016 to 2019.FindingsThe results underline the importance of board composition and the ownership structure in explaining variations in dividend policy across Saudi firms. More specifically, there is a positive relationship between the propensity to pay dividends and board-meeting frequency, institutional ownership, firm profitability and firm age, while the degree of board independence, firm size and leverage exhibit a negative relation. Further, dividend per share is positively related to board meeting frequency, institutional ownership, foreign ownership, firm profitability and age, while it is negatively related to CEO duality, managerial ownership, and firm leverage. There is no evidence that family ownership exerts an impact on dividend payout policy in Saudi firms. The findings of this study support agency, signalling, substitute and outcome theories of dividend policy.Research limitations/implicationsThis study offers an important insight into the board characteristic and ownership structure drivers of dividend policy in the context of an emerging market. Moreover, the study has important implications for firms, managers, investors, policymakers, and regulators in Saudi Arabia.Originality/valueThis paper contributes to the existing literature by providing evidence on four board and five ownership characteristic drivers of dividend policy in Saudi Arabia as an emerging stock market, thereby improving on less comprehensive previous studies. The study recommends that investors consider board composition and ownership structure characteristics of firms as key drivers of dividend policy when making stock investment decisions to inform them about the propensity of investee firms to pay dividends and maintain a given dividend policy.

How does ownership structure affect the financing and dividend decisions of firm?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tahar Tayachi ◽  
Ahmed Imran Hunjra ◽  
Kirsten Jones ◽  
Rashid Mehmood ◽  
Mamdouh Abdulaziz Saleh Al-Faryan
Keyword(s):  
Ownership Structure ◽  
Dividend Policy ◽  
Generalized Method Of Moments ◽  
Institutional Ownership ◽  
Agency Cost ◽  
Debt Financing ◽  
Policy Implications ◽  
Managerial Ownership ◽  
Content Type ◽  
The Impact

Purpose Ownership structure deals with internal corporate governance mechanism, which plays important role in minimizing conflict of interests between shareholders and management Ownership structure is an important mechanism that influences the value of firm, financing and dividend decisions. This paper aims to examine the impact of the ownership structures, i.e. managerial ownership, institutional ownership on financing and dividend policy. Design/methodology/approach The authors use panel data of manufacturing firms from both developed and developing countries, and the generalized method of moments (GMM) is applied to analyze the results. The authors collect the data from DataStream for the period of 2010 to 2019. Findings The authors find that managerial ownership and ownership concentration have significant and positive effects on debt financing, but they have significant and negative effects on dividend policy. Institutional ownership shows a positive impact on financing decisions and dividend policy for sample firms. Originality/value This study fills the gap by proving the policy implications for both firms and investors, as managers prefer debt financing, but at the same time try to ignore dividend payment. Therefore, investors may not invest in firms with a higher proportion of managerial ownership and may choose to invest more in institutional ownership, which lowers the agency cost.

Does corporate social responsibility affect dividend policy? Empirical evidence in the French context

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olfa Ben Salah ◽  
Anis Ben Amar
Keyword(s):  
Corporate Social Responsibility ◽  
Panel Data ◽  
Social Responsibility ◽  
Dividend Policy ◽  
Least Squares Method ◽  
Positive Impact ◽  
Alternative Measure ◽  
Content Type ◽  
Corporate Social ◽  
The Impact

Purpose The purpose of this paper is to focus on the impact of corporate social responsibility (CSR) on dividend policy in the French context. In addition, the authors seek to determine if the individual components of CSR influence dividend policy. Design/methodology/approach This study uses panel data methodology for a sample of French non-financial firms between 2008 and 2018. Generalized least squares method is used to estimate the models. Findings Using panel data methodology for a sample of 825 observations for the period 2008–2018, this study finds a positive impact of CSR practices on dividend policy. The authors also find that individual components of CSR positively influence dividend policy. To check the robustness of the results, this study further runs a sensitivity tests, including an alternative measure of dividend policy, all of which confirm the findings. Practical implications This study has examined the impact of CSR on dividend policy in France and may have implications for regulatory, investors, analysts and academics. First, the involvement in CSR best practices encourages companies to pay more dividends to investors. Therefore, investors are more motivated to invest in socially responsible firms than socially irresponsible firms. Second, given the association of CSR with the quality of accounting information and financial markets, regulators should step up recommendations relating to the different societal dimensions of CSR. Originality/value While little previous work has focused on the causal link between CSR and dividend policy, this research is the first, to the authors’ knowledge, to have looked at the impact of CSR on dividend policy in France.

Sign in / Sign up

Export Citation Format

Share Document